Fashion’s Climate Promises: Which Are Greenwashing and Which Are Science?
- by Dora Chi Xu
- Oct 13, 2021
- No Comments
The latest IPCC report paints a dystopian future for humanity as our planet marches into the 1.5 degree ℃ danger zone. In fact, we are already feeling the effects, with multiple freak storms causing deadly flooding in Europe and the United States, huge wildfires sweeping across California and Siberia, and unusually hot and cold weather taking down power grids.
The climate crisis is here, and fashion is a guilty party.
A recent World Economic Forum (WEF) and Boston Consulting Group (BCG) report has temporarily put to bed a debate on how to assess the climate impact of the fashion’s industry, estimating that fashion accounts for around 5% of global carbon emissions, ranking only behind food (25%) and construction (10%).
What’s more, changing climate patterns and extreme weather events disrupt distribution networks and damage factories, leading to shortages, poor quality, and higher costs. In other words, you will be paying more for worse clothing in the future.
The fashion industry canafford to address its climate problem. Of the eight carbon-intensive sectors examined in the BCG report, fashion has the second highest profit margin. In addition, over the past five years, demand for sustainable products has grown seven times faster than their conventional counterparts, and can fetch a premium of around 40%, according to some research. If true, that more than compensates for the cost of achieving a net-zero supply chain.
Leaders in fashion have recognized the urgency to ramp up decarbonization efforts. The Sustainable Apparel Coalition (SAC), for example, has outlined a target for its members to cut emissions by 45% by 2030. So far, 94 fashion retailers, including Kering, Nike, VF Corp, Eileen Fisher, have either set or are committed to setting science-based targets.
But not all climate targets are created equal. There are many terms that brands use in their climate campaigns, such as “science-based targets”, “net-zero”, “carbon neutral”, “climate positive”, or “carbon-negative”, but each differ in scope, rigor, and ambition. Let’s break down the climate linguistics:
Science-based targets are time-bound goals to reduce greenhouse gas emissions related to a company’s activities and keep global warming within 1.5 ℃ by 2030. Science Based Target has very clear and rigorous guidelines and does not allow for offsets.
Ecocult contributor Amirah Jiwa has written a clear and succinct explainer on how a company’s carbon footprints are calculated. The lion’s share of fashion emissions usually come from Scope 3: fabric production, dyeing, transportation, and laundry. If a company’s scope 3 emissions make up more than 40% of the total emissions, then a Scope 3 target is required, which involves either engaging suppliers to set a science-based target or helping suppliers cut emissions.
Companies can either set intensity reduction targets or absolute emission reduction targets. Intensity reduction targets are based on emissions per product output or dollar value. For example, Kering, the parent company of many luxury fashion houses, has reduced its carbon intensity per revenue by 24% since 2015. The group’s total carbon emissions increased, however, because of business growth — they sold more stuff. In general, absolute targets are more ambitious because the company’s total emissions need to be reduced even if they grow their operations and produce more items.
Net-zero or climate neutral targets are longer-term goals that require two conditions: One is cutting emissions consistent with the 1.5 °C pathway by 2030, and the second is neutralising or compensating any residual emissions that a company can’t eliminate by permanently taking out carbon from the atmosphere (through planting trees or carbon capture, for example) by 2050. Net-zero or climate neutral targets must cover scope 1, 2, and 3 emissions.
Carbon neutral is often used synonymously with net-zero or climate neutral, but has a different scope, level of ambition, and offset approach. Carbon-neutrality does not mandate a scope 3 target, and has no requirement to reduce emissions on a certain trajectory (e.g. 1.5 °C pathway). It also has less stringent requirements for how long the carbon has to be kept away from the atmosphere, meaning carbon credits from projects that reduce, avoid, or temporarily capture carbon are accepted.
Climate positive (or “carbon negative”) means to remove more greenhouse gases from the atmosphere than we emit. However, there is no official accounting framework for climate positive or carbon negative, so such claims are mostly marketing campaigns, especially since many companies rely heavily on offsets.
Currently, offsets are incredibly cheap and only cost brands as little as a few cents per product, but they can be a dangerous distraction if the brands decide to stop there. Carbon offsets should be used carefully and sparingly because trees planted today cannot grow fast enough to take in all the carbon if our emissions keep growing exponentially. (Some forests used for offsets are currently burning in California, releasing all that carbon back into the atmosphere). Truly climate-conscious brands would instead focus on actually reducing and sequestering their emissions across the value chain, through better design or regenerative practices.
Roadmap to meeting climate targets
Now that we have a high-level understanding of why it’s important for fashion companies to set a climate goal and which type of targets are best — science-based and net zero — let’s dive into how fashion brands can meet those targets:
Get all employees on board.
Decarbonizing the fashion value chain requires changing how business operates, from design, sourcing, to manufacturing, and shipping. All of this calls for internal alignment, plus a committed team that works across departments.
Some common practices adopted by sustainability leaders in fashion include linking executive pay with emission reduction targets, providing sustainability training for employees who design products and work with manufacturers, and making sure their goals don’t conflict with one another.
Fashion brands can include emission metrics when considering which suppliers to work with, and set a minimum threshold of required share of renewable energy or recycled materials use for suppliers. They can establish preferred supplier programs, and reward climate action with better payment terms.
Some forward-thinking corporations have also experimented with an internal carbon charge. LVMH, for example, set up an internal carbon fund in 2015, asking its numerous subsidiary fashion houses to pay €15 for every tonne of greenhouse gases that they produce. The proceeds are then used to invest in emission reduction projects such as efficient lighting and cooling. By “taxing” itself for carbon, LVMH created a mechanism that incentivized brands to cut emissions, pooled financial resources for the group’s sustainability initiatives, and prepared the group for a future with a carbon-tax.
Forecast trends with digital science.
A major cost-effective option to curb absolute emissions is to produce less, with more agility and precision. The traditional fashion calendar has been very difficult to navigate, as consumer taste can change significantly from the time a conceptual seasonal collection is sketched out to when the products actually arrive in the store. The result? A significant portion of garments produced are never sold, even after heavy discounts.
Now, leading digital trend service providers such as Edited, StyleSage, and Trendalytics are able to use artificial intelligence to scrape ecommerce platforms, product reviews, social media, and search engines to provide dynamic, near real-time trend curve forecasts. With these insights, fashion companies can understand consumer sentiment before producing the products, and can hit the same profit margin with much less inventory, thereby cutting overstock, cost, and waste.
There is a risk that this data could be used for ill, however. Witness ultra-fast fashion brands using data to churn out more and cheaper clothing.
Produce only what you will sell.
On-demand manufacturing and mass-customization are also win-win solutions for fashion companies to hit both their financial and environmental targets. For example, startups like Ministry of Supply offer customers the option to design their own blazer and 3-D knit the garment in less than two hours. Larger companies like Adidas and Eileen Fisher have also experimented with laser body scan and 3-D knit sweaters in pop-ups. In fact, McKinsey’s 2019 State of Fashion report predicted that on-demand manufacturing would become mainstream by 2025.
To make this business model work, however, fashion companies have to revamp the entire design and production process. Instead of trendy, seasonal collections, it’d be better for designers to work with classic, versatile pieces, to flatten the learning curve and reduce lead time for factories and seamstresses. Fashion companies also need to find the right manufacturing partners who are willing to change the way they work, and cushion the risk by committing to a minimum order. The unit cost might be slightly higher, but the company is not spending any money on items that won’t sell, thus preserving their profit margin and reducing waste.
Design out the waste.
After eliminating unnecessary production, the next step is to produce as low-impact as possible. Since 80-90% of a product’s impact is set in stone once it’s designed, designers and product development teams have tremendous leverage to slash the carbon footprint through better material choices and more efficient pattern making. For instance, VF Corporation uses the Higg Materials Sustainability Index (MSI) tool to assess fabric decisions and commit to sourcing their top nine materials (which contribute 90% of materials-related emissions) to regenerative, renewable, or recycled origins by 2030.
In particular, synthetic fiber production makes up around 40% of carbon emissions in the fashion value chain. Swapping conventional synthetics with natural or semi-synthetic fibers produced in closed loop systems, like Tencel, modal, or cotton silk blend from sustainable sources, could significantly cut emissions. For in-series products, or where synthetic fibers cannot be replaced for performance reasons, incorporate as much recycled input as possible and source from suppliers that use renewable energy.
In addition, using deadstock or other existing materials, adopting jigsaw pattern cutting also minimizes waste and carbon impact. For example, boutique fashion label Good Krama tried to minimize its footprint by sourcing discarded textiles, using hand-weaving and air-drying processes, and offsetting what it cannot avoid by investing in forest conservation projects in the supply region.
Know your suppliers.
The biggest opportunity to decarbonize usually lies outside of a company’s headquarters, since over 80% of the emissions occur in the supply chain, especially at raw material and fabric production level. Fashion companies must look beyond cut-and-sew factories and know their supply chain hotspot.
The best-in-class companies like Eileen Fisher, Patagonia, and VF Corp have already traced their key products to tier 4 level using platforms such as SourceMap. Once the supply chain has been mapped, the next step is to target the suppliers that represent the largest share of a company’s emissions. Fashion brands can work with Carbon Disclosure Project (CDP), Higg Facility Environmental Module, or software platforms like Optera, which compiles information on which suppliers have reported their emissions, how good is the data quality, and whether any suppliers have set climate targets.
Work jointly with suppliers and peers.
According to WEF and BCG, 70% of emissions in the fashion value chains can be eliminated at little to no cost (less than 10 euros per ton of carbon equivalent). Efficiency programs and switching from wet to dry finishing could reduce 25% of emissions in the value chain. Switching to renewable power and improving factory efficiency both have fast payback periods, often within three to five years of the initial investment. Levi’s, for instance, has been funding efficiency assessments of factories, saving its partners $1 million through improved lighting and leak-reduction systems.
Garment manufacturers usually run on slimer margins than that of retailers, and are generally hesitant to invest in costly upgrades only to see their customers switch to cheaper suppliers later. Fashion companies could share the risk by co-investing with suppliers, or signing an offtake agreement, which guarantees a minimum order after a certain sustainability measure has been implemented. The fashion industry could follow the lead of tech giants like Apple, Google and Facebook, which have been signing world-record commitments for renewables in China and Southeast Asia, to give their suppliers access to renewable energy.
Of course, no company can move the needle single-handedly, especially since each factory supplies up to a dozen brands or more. They need to share best practices, pool resources, and scale up demand for sustainable fiber and clean manufacturing technologies. Tapping into innovative financing models such as green bonds and sustainability-linked loans also help fashion brands to raise funds and invest in sustainability projects.
Inset unavoidable emissions.
Even the most well-designed and consciously produced garments still have an impact. Thus, for companies interested in pursuing a net-zero goal, the next step is to remove carbon from the atmosphere to compensate for unavoidable emissions. Instead of buying offsets from projects totally irrelevant to a company’s core business, I’d recommend looking into insetting, or investing in carbon sequestration projects within a company’s own supply chain or supply shed. Insetting builds more credibility behind a company’s sustainability claims and strengthens supply security.
Trailblazers like Patagonia and Timberland have been piloting carbon sequestration through nature-based solutions such as regenerative agriculture, which promotes biodiversity, restores soil health, and often captures more carbon than conventional and organic farming.
There are a range of initiatives around regenerative farming or grazing: Regenerative Organic Certification (ROC) covers soil health, animal welfare, and Fairtrade; The Savory Institute focuses on animal-based products using holistic planned grazing. However, none of these certifications include the testing and reporting necessary for companies to be able to apply and receive carbon credits. The Science-based Target Initiative (SBTi) has been developing guidance to account for carbon emissions and removals from land-based projects that will be published in 2022. Therefore, I’d recommend fashion companies to work with a carbon project developer such as South Pole or Native Energy to rigorously monitor soil carbon and verify the carbon credits.
As we stand on the brink of a climate apocalypse, fashion has a crucial role to play in keeping the planet habitable for humans. Fashion brands would do well to set science-based climate targets and work toward them now, instead of waiting for the government to step in and do it for them.